My *Stubborn Attachments* essay for Cato Unbound

Here it is, here is one excerpt:

The classics of political philosophy deal with wealth and economic growth awkwardly at best. John Rawls, in his Theory of Justice and elsewhere, was suspicious of economic growth outright. Rawls feared that the savings rate of the first generation would lead to deprivation, and a diminishment of the well-being of the worst-off group (that first generation), and so he toyed with John Stuart Mill’s idea of the stationary state. Robert Nozick evinced a good understanding of markets in his Anarchy, State, and Utopia, but still he focused on individual libertarian rights as an underpinning for a free society. Like Nozick, I believe in individual rights, but I don’t think they settle most questions, and I don’t find modest levels of taxation under democratic conditions to be morally problematic.

In part I wrote Stubborn Attachments to respond to Derek Parfit’s Reasons and Persons, first published in 1984. In that wonderful book, Parfit wondered whether consequentialist reasoning could in fact produce coherent recommendations, for either individuals or societies. Yet there is no talk in Reasons and Persons of economic growth, or how a much better future might help resolve aggregation problems. Nonetheless Parfit did produce an important appendix on why the social discount rate should be zero, and you can think of Stubborn Attachments as trying to think through the broader implications of that argument.

And:

You should always ask what are the weakest points of any book, including this one. For me, it is the fear that progress has a mean-reverting character and that improvements end up as temporary rather than sustainable. In that case, the idea of enduring benefits would be an illusion, and even if pursuing such benefits were a good recommendation we might end up with the empty set in terms of policy recommendations. Historical pessimism would trump my recommendations, and we would be devoting our energies to the proverbial rearranging of the deck chairs on the Titanic.

Furthermore, Stubborn Attachments gives little guidance on how to offset the claims of humans versus the claims of nature. The benefits of economic growth are specified for human beings, and it is less clear that such economic growth is good for the animal kingdom as a whole, given the encroachments of humans and also the tortures of factory farming. If it is any consolation, however, I don’t think other philosophers have solved that problem either. Utilitarians, for instance, offer no plausible guidelines for weighting the well-being of non-human animals versus the well-being of humans, nor have they shown how it might be feasible to follow such guidelines.

Philosophical critiques will be forthcoming, so stay tuned!

Comments

OK, Here's a philosophical critique:

Your future utility is NOT the utility of (non-existent) future generations. It is no more their utility than it can be the utility of future Unicorns or other imaginary entities. It is the present utility of Tyler Cowen vicariously contemplating the utility of future generations and hence what a Really Altruistic Future-Orientated Person He Is.

Similarly, you are confused about the relative claims from Nature, because having created moral claims for non-existent entities, there is no end to the conflicting desiderata. One is left to weigh the claims of a 1,000 future lions against a single future human. I imagine the distress must be even greater at the human-nature margin: how does such philosophy prescribed the number of happy chimpanzees will you trade for a happy human? Or perhaps, more pointedly: a superhuman AI vs a happy human?

In decision theory, which you would expect an economist to know, only extent, present utility is counted in the equations. This may be properly adjusted to deal with discount rates and outcome probability, but it is the utility of the present decision makers that is weighed, not potential future entities! Future generations and their happiness are valuable only to the extent that we, the living, value that future in the present. They and their utility do not exist and have independent claims against our present action.

The whole savings argument is based on an appalling ontological confusion.

You are mixing two meanings of the word utility here:
One is its formal use in decision theory. In this context, the statement "[It] is the utility of the present decision makers that is weighed" is indeed true by definition. However, this "decision utility" can very well include the well-being (the original meaning of the word utility) of future beings, without any ontological confusion.

Disagree. I am well aware of how "future entities" are typically included in Decision Theory. But that is exactly the point which I think Tyler and yourself are being very careless about. At best it is sloppy parsing. At worst, it leads to catastrophically bad utilitarian reasoning like above.

The formulation in decision theory is "what should we (the acting agents) do to maximise our utility". Not "what should we do to maximise utility of ourselves and an under-defined set of non-existent bystanders". The utility of non-deciding entities is entirely vicarious. This does not mean it does not count - merely it only counts insofar as acting agents desire it to count.

Anyway, decision agents should have certain properties; they should, in some sense, have a common preference function. They should have cohesive real identities (I should be able to point to the entity at the time of decision). And I would add that well-formed agents should also be parsimonious in relation to their choices (if you can deduct an entity from an agency and no effect on the span of that agency's choices, then that entity has no business being in the agency).

Tyler's decision-theory saving calculus violates these assumptions even under a utilitarian ethic. His decision theory agents are not well formed. It is an ontological error.

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To express it another way, it is an Reification error; "the utility of happy future generations" is not a real thing. They don't exist. They have the same existence state as Unicorns. You can no more justify a decision theory with appeals to their future utility than I can justify one with appeals to the utility of future Unicorns. Once you allow the utility of non-existent entities to feature in these affairs there is no end to the madness.

"Our utility from expecting happy future generations" - well, that is a thing. That's what you're actually weighing when you think you are weighing your children's utility. You're measuring your apprehension of their utility.

"Our utility from expecting happy future generations" - well, that is a thing. That's what you're actually weighing when you think you are weighing your children's utility. You're measuring your apprehension of their utility.

You wrote 572 words in three separate comments, all to make the point that Tyler should have said, "We ought to focus on our utility from expecting happy future generations" instead of "we should not discount the future well-being of humans and also future humans"?

I know, but it's an important error that had not been previously noted. It also needed some space to develop the point, as subtle semantic errors do.

The error means in practise we have a much higher discount rate, reducing the policy strength of "Stubborn Attachments" and Tyler's Nature-Human confusion goes away.

It also has a strong bearing on related AGW calculations.

When Tucker Carlson questions the merits of market capitalism, something isn't right in the world. Indeed, Carlson singles out libertarian economics for special criticism. I don't wish to divert attention from Cowen's very important book or his essay in Cato Unbound, but Carlson has succeeded in sucking all of the oxygen from the air. My view is that Carlson doesn't oppose market capitalism; rather, he is simply acknowledging that Trump's election and the support of his base depends on Trump's return to more populist rhetoric. Trump doesn't have to deliver a populist agenda (or walk the walk), he just has to talk the talk. Anyway, here is a good summary of Carlson's rant: https://www.vox.com/2019/1/10/18171912/tucker-carlson-fox-news-populism-conservatism-trump-gop

"I don't wish to divert attention from Cowen's very important book or his essay.."

Then maybe you should avoid rudely derailing this post with a completely unrelated topic.

It's not unrelated. Read my comment below.

Yes, I could see how a perfectly normal reader would immediately jump from "My *Stubborn Attachments* essay for Cato Unbound" and some critical comments Tucker Carlson made about Laissez-Faire capitalism. {rolls-eyes}

I broadly agree with this. I would put my critique of Cowen this way: who are you giving your policy recommendations to? Future individuals do not yet exist, while animals do not participate in the political process. If then you present your policy recommendations to the ultimate sovereign in democratic states, the currently living people, you need to convince them why they should view your offered policy recommendations as something they should support in the democratic process, over alternatives policies. The current people might be interested in policy effects on their descendants, but the amount by which an individual evaluates positive effects on future generations to outweigh negative effects on current generations or vice versa (the "discount rate") is at least in part a genuinely individual preference, which furthermore will differ amongst individuals. Some people might only care for themselves, some will also weigh effects on their or other people's children as grandchildren, and some might even have a zero discount rate.
I see in a similar manner the problem of "animal rights": any policy advice should have to convince the democratic sovereign on why proposed rules regarding animal welfare (and here it might make more sense to talk about specific legislation rather than broad "animal rights") makes the resulting pattern of outcomes more desirable, in their own evaluation, than alternatives. This evaluation can include an interest in wellbeing of animals, but it will again be at least in part an individual preference and will likely differ amongst different people. The policy advice itself should in a democracy be addressed to and try to convince the ultimate sovereign, the currently living people. Once you have clarity on the adequate addressee
of policy advice, the problem seems to me to be less a "philosophical" problem, but more a technocratic one of assessing outcomes and costs of policies, including the (admittedly tricky) problem of assessing the effect of policies on the psychological and overall wellbeing of animals, as far as the addressee of policy advice cares about this part of the outcome pattern.

Oh, I wanted to paste this under Alistair's comment above, my error

I saw it. Nearly fully agreed.

Glad to see you expounded that the actual Individual preferences on the utility of future generations would be messy and may depend greatly on if they think their descendants are affected. There are lots of uncomfortable thought experiments for Tyler here.

The concept of social discount rates gives me headaches on multiple levels -- starting with the potential confusion and incompatibility or aggregate versus individual evaluation of future versus current. I'm sure that is well covered in literature but that still leave the issue of terminology. Either the discounting is different in the two setting or the rate is not a social one (it's a normal discount of some subgroup or even a specific decision-maker). But leave that aside.

If one argues for a 0 discount rate we're saying we should be completely indifferent between consuming today and investing to consume tomorrow. Given normal political behavior, this seems to argue for never investing and only consuming more than anything else. (perhaps the the empirical implication -- we behave that way so the rate really is 0, borrowing rates not withstanding.)

In other words, it seem to say investment decisions in the social decision-making space will not be based on anything related to returns or growth (which fits with the first thought above that social and individual setting are alien to one another). In other words, the 0 argument is to say there is simply no room for discounting thinking -- timing is meaningless.

I find that both disturbing and wrong.

I agree with you about most of what you wrote. I too am confused and don't understand how Tyler is reaching his conclusion.

"If one argues for a 0 discount rate we're saying ... timing is meaningless."

Much like you, I feel like this philosophy is completely wrong. And trivially wrong. Since Tyler isn't stupid, I keep coming back to the conclusion that I'm misinterpreting him.

The SDR concept is indeed very wrong (it has some uses, but it's not conceptually sound). It's main error is to treat prospective future generations as a real, currently existing thing for utilitarian claims. Currently, unconceived future generations have the same existence property as Unicorns. i.e. "none".

This is why there is such a gap between the observed savings rates (including Tyler's) and the hypothetical SDR. I give further ontological reasons above.

I disagree with you a bit. Future generations might not exist, but they probably will. Certainly I'm far more likely to see a grandchild some day than a unicorn. Furthermore, I'm willing to devote some of my effort to their concerns. Certainly when it's my existing children, but even just for humans in general.

But the idea of treating them identically is absurd. Time has value and that doesn't change if you are talking about money or future generations. Even in specific cases the issue is there.

I think a parallel to this situation would be how you treat fellow citizens over non-citizens. Following Tyler's argument, I would assume that he would equally value a random stranger from another country to a random stranger from across town. I (and probably the overwhelming majority of people) would not. I'm curious where Tyler attempts to draw the line? What groups does he value more highly than others?

Of course, Cowen's path to greater economic growth is market capitalism. The problem is one of consensus: are the current rewards of market capitalism so concentrated at the top, there will not be a consensus for policies that increase economic growth at the expense of current consumption. As I pointed out in another comment this morning, South Korea, even with its high growth rate, is losing the consensus because so much of the benefit is concentrated at the top; dependent on globalization for economic growth (43% of SK's GDP comes from exports), the retreat in globalization is hitting hardest on labor and small business in SK. Globalization complicates Cowen's goal for the adoption of policies that increase economic growth. If Tucker Carlson's rant has any merit or appeals to a large segment of the population, then maybe market capitalism isn't the path to Cowen's goal unless a much more robust form of redistribution is implemented. One step forward, two steps backward?

I enjoyed Cowen's new book and I appreciate his writing style, but to boil it down he is simply arguing for more investment and less consumption in order to generate faster growth and a richer future. The point of the zero discount rate is to emphasize the importance of the future relative to the present (you gotta have math) but, unfortunately, it has become a distraction. My point is that Cowen's argument may be well and good, but convincing the top 1% who have benefited from globalization is not the problem: convincing those left behind during globalization that they should forego consumption in order to achieve faster economic growth and a richer future for the already-wealthy is a tall order.

Progress: the temporal myth sponsored by modernity that we live already in an irrevocable future.

(Myths generally continue to enjoy more staying power among human beings to this day than the specific modernist myth of progress itself has yet managed to attain. Thus:)

News: the first draft of myth.

(Money, of course, has no mythic status to enjoy:)

Money: in worlds of two dimensions, the cure for every ill and the solution to every problem. The efficacy of money in curing ills and solving problems in two-dimensional circumstances owes to the perfectly realized forms of currency and coin in obverse and reverse.

(Cf. also:)

Wealth: the ornamental mask in which poverty makes all its starring roles.

and

Poverty: ability to do without; inability to do without; inability to do with.

(Tyler can cite other diction relevant to his argument, certo.)

"We need to adjust GDP for instance to take into account ... For instance, health matters above and beyond wealth, but still a healthier population is likely to be more productive."

Was the point of this comment that we need to avoid double counting? If so, that's an excellent point. You can't just add a linear health metric, because a healthier population already contributes to the traditional measure.

"Fourth, we should not discount the future well-being of humans and also future humans. ... You don’t have to believe the discount rate on future well-being should be exactly zero in all circumstances; "

I'm still baffled by this. I would certainly agree that the future well-being discount rate might be different than a standard financial discount rate. And there might be cases where it should be Zero. But when I try to think of examples, it's always seems clear that time has value and thus if you weight future well being identical to current well being, you are ignoring the value of time and are thus underweight current well being.

I'll have to re-read that section of Stubborn Attachments. Probably with a high lighter , two colored ink pens and a notepad. ;)

I'm not well versed in economics jargon and I found his essay nearly impenetrable. (Singerian??) But I've got to admit that the first sentence evoked a guffaw: "Absolute human rights"? ROLF. And then there's this:" In particular, I believe that life in a much wealthier society is better for virtually everyone." I'm wondering if that "virtually" includes the 1300 children who die by gun violence (including suicide) in the US each year, or the 40,000 who die (majority via suicide) by gun annually? Or how about the estimated USA 550,000 homeless each night, our prison population, and the seriously mentally ill? They are better off in the USA than in all/any "much" poorer countries? Are you sure? [citation needed]. Aside from the fatuous use of the term "nature" what I found (or rather didn't find) so disturbing was the complete absence of the discussion of the education of our children as THE critical investment that our (their) future depends on, and one we're failing at.

There's an overwhelming amount of evidence that life in the first world is much better than life in the third world. Granted, that's always an average. Certainly there are drug lords in South America who's lives are much better than a homeless guy in LA.

Of course you can always go live in the third world and come to your own conclusions.

I agree.

But...a note of caution....we have plenty of evidence that it's not wealth alone which generate happiness especially at higher incomes . Let's not assume that wealth creation is necessarily non-injurious to other aspects of welfare; you don't have to be a raving socialist to see its a least possible to maximise GDP/Capita but still manage to screw up security, inequality, and freedom.

Agreed, and that's why I said it's an average.

But my comment was more broad than pure wealth. Being in the first world also means being in a society where your life and happiness have a much higher value to society (on average) than being in a third world country. Furthermore, it's a society which allows people (on average) greater choice, liberty, healthcare, prosperity, etc.

Yes, Ceteris Paribus, wealth is the way to go.

TBH; I'm not sure that the value of life in first world countries isn't mostly a function of wealth. Looking around the world it seems that GDP/Capita predicts value of life better than western values / freedoms / culture, and that fits with the historical data too.

Dr Cowen covers this in the book. He is pretty emphatic that creating wealth doesn’t create happyness all by itself.

It is wealth-plus, the positive externalities of wealth-foundations, free time, cleaner technologies, research funding, that creates a lot of human happiness....

ROLF => ROFL

'that improvements end up as temporary rather than sustainable'

Seems to skip over the question of knowledge entirely, unsurprisingly. The germ theory of disease is a major step forward in how humans can use their knowledge to improve their lives, without that idea being measured in terms of 'growth.'

An idea whose utility, much like that of the idea of the arch or of the lever, will be measured in extended periods of time, as the idea itself provides a number of benefits that have nothing to do with growth per se. In terms of the arch, for example, the idea has completely outlived the myths of the societies that first used (or described) it. Admittedly, the myths of those using Gothic arches are still alive today.

It is hard to imagine any future society losing all awareness of how to build arches or use levers, regardless of how much economic growth occurs or does not occur in the future.

-1, dumb comment.

Tyler made it clear that his book has an implicit assumption that improvements are sustainable and if " improvements end up as temporary rather than sustainable'" then his book would have a fundamental flaw.

Clearly you agree with his assumption. Therefore, you've made a substantive critical post based upon poor reading comprehension.

What is the 'improvement' that is associated with an idea based on an understanding of empirical reality?

The germ theory of disease is just as applicable in a hunter-gatherer tribal situation (think something along the lines of clean water requires killing those things that can be called 'germs' so as to prevent disease) as it would be in a society at the cultural level of the UK in 1800. Or ours today, of course.

An idea may represent progress in terms of knowledge, but an idea is not itself economic growth. Euclid's geometry comes to mind as a concrete example of where the value of such ideas remain independent of economic growth.

And the Gothic arch example was not simply randomly chosen - what is the value of an idea used to build structures that have no apparent actual economic return on investment, and can be seen as creating a reduction in growth, not an increase.

You're not even wrong.

Tyler's piece is an excellent summary of the book. Look forward to the discussion to follow. Let's hope the Cato discussants actually read what he wrote and think about it.

We have spent the past 40 years trying to get the owners of capital to invest, yet investment in productive capital has lagged. Cowen has commented before that he would like to see a zero tax rate on capital. But investment in productive capital was much higher when the highest marginal tax rate was 90% or 70%. I'm not disagreeing with the efforts to increase investment (real economic growth depends on increased productivity and increased productivity depends on investment), but we seem to be doing it all wrong. What message does it send when one of the nation's most recognizable wealthy persons spends $250 million on a boat. I am all for placing greater importance on the future relative to the present, but make no mistake: the working class are expected to bear the brunt of the cost (through lower current consumption). Here's a dumb idea to complement the dumb idea of giving tax cuts to the wealthy with the expectation they will invest in productive capital: impose a tax of 50%, no 100%, on frivolous purchases above a certain threshold, say $5 million per person per year. If a rich person is to be rewarded with generous tax cuts solely for being rich, then penalize the same rich person who chooses conspicuous consumption over investment.

OK, if someone spends $250 million on a boat, where does the money go? It goes to a boat builder, who in that category of boat will be a big company employing hundreds of craftsmen, mechanics, executives, and so forth. They all spent every penny they get, on mortgages, lunch, their kids' tuition, and whatever else they want. The boat builder also buys tons of steel, wood, kitchen appliances, an engine the size of a small airplane, and all those purchases wind up in the hands of workers, executives, shareholders, etc. of the companies that make them. So how can you say the $250 million was wasted?

"the claims of humans versus the claims of nature."

Nature is amoral and has only the claims we as humans decide are pleasing to us. To look for intrinsic value there amongst the starvation and predation and mindless fecundity seems absurd -- surely relatively humane farming is the lesser of evils for the unsapient. Do you wash your hands? Woe to the bacteria, foremost among life! What does not serve us is always trying to eat us, and eventually something succeeds. Take it for what it is.

Heheheh.

Indeed. Nature has only the value we give it. Avoid naturalist error, people!

>it is less clear that such economic growth is good for the animal kingdom as a whole

Whoever wrote this is an idiot.

"It is much better to live in the United States than Albania,"

That depends... I am considering moving back to my country even though its per capita GDP is 1/4 of US's.

I don't understand how someone can say they believe in individual rights, but don't believe they answer most questions. Not if the questions they ask relate mostly to what to have for dinner. On the other hand, they settle the most important questions relating to politics and economic policy. Or do you think US founders were deluded in their use of individual rights to guide the structure of government?
As for the claims people have on rocks versus the claims rocks have on people, and their relative weight, that's a question I expect tribal shamans to ponder but not rational philosophers.

"Furthermore, Stubborn Attachments gives little guidance on how to offset the claims of humans versus the claims of nature. The benefits of economic growth are specified for human beings, and it is less clear that such economic growth is good for the animal kingdom as a whole, given the encroachments of humans and also the tortures of factory farming."

I think you underestimate your argument. The key word is "sustainability. Sustainable economic growth is what you are arguing for. And to have sustainable economic growth means that you do not destroy the ecosystem on Earth that makes life possible. In order for humans to succeed, humans will have to protect the other life on the planet. Without the other life, humans will fail. In other words there is no conflict between claims of humans versus the claims of nature. You can't have one without the other.

But we have not yet learned that. Nor have we understood it's implications.

Tyler, I wish you would give greater attention to the importance of economic freedom, namely the ability of people to work together voluntarily to engage in economic relationships to fulfill needs. That is the basis of the productivity increases to enhance economic growth.

I am also with your point of view which you wrote

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